Facebook made a significant move into the potentially lucrative local business advertising space on Monday with the launch in the UK and other European countries of Places Deals, which gives users discounts and benefits with nearby shops, restaurants and venues through their mobile phones.

Launched in the US last November, Facebook Deals lets users 'check in' to venues via the Places feature on its mobile app for iPhone, Android and through facebook.com on some smartphones.

Facebook says millions of users are already choosing to check in to venues, and its app is already the most popular in Apple's iTunes Store. More than 250 million people use Facebook every day from a membership of more than 500 million worldwide, and more than one third of those access the site through mobile.

Through deals with partners announced today, the first 30,000 Facebook users to check in at Starbucks stores in the UK can claim a free coffee, the first 1,000 to check in at Debenhams will receive a free mascara and makeover, and the first four to upgrade their contracts and check in at O2 stores will win a free Xbox or Playstation.

Mazda, Yo! Sushi, Usher and Alton Towers also announced offers, while Argos and Benetton are donating to charity with a set number of checkins. Companies can list themselves for free in Deals, and Facebook says it does not take any share of revenues from the promotions.

Facebook Places Deals, which is also launching in Germany, Italy, France, Spain and Canada, is seen as a major part of the company's commercial strategy, potentially linking users to any business from national retail chains to local stores, and allowing those businesses to effectively advertise through the social networks of their most regular customers by publishing. Depending on a user's privacy settings, Deals they take part in will be published in the newsfeed that their friends follow.

"The wisdom of friends has taken over from the wisdom of crowds, through a highly personal experience in the real world, and Facebook local enables users to take that Facebook identity out and about with them as they experience the real world – likewise using that to inform that Facebook identity," said Emily White, Facebook's director of local. "Places is the 'where' to 'what am I doing' and 'who am I with'. And it allows businesses to start joining the conversation."

White would not speculate on whether Facebook's on-site payment system Credits, which is currently used only for gaming, would be extended to be used with on-site commerce, or whether businesses may pay for elements of Deals in the future. She would only say that Facebook's focus is on developing "a phenomenal user experience".

Venues announce Deals with a 'golden ticket' that appears next to their name in nearby venues when a user opens Places in the Facebook app. Users can see the deal, claim it and show the voucher on their screen at the check out, but Facebook does not share the name or contact information for each customer with businesses.

White noted that brand pages on Facebook attract far higher traffic than official brand websites. Coca-Cola, she said, saw around 270,000 monthly unique users on its own sites but 22.5 million on Facebook.com. She said retailers would not just offer discounts, but can encourage customers to donate to charity or use the scheme more like a loyalty card.

White dismissed comparisons with daily deals site Groupon and the social location game Foursquare. "[Places] is about where you are at the moment. It is very different from Groupon's offering today and takes advantage of the unique platform Facebook has."

Despite those denials, Facebook will be keen to build on the attention given to Groupon, which rejected a high-profile $5.3bn acquisition offer from Google in December.

Deals also puts Facebook on a collision path with Google, which makes the overwhelming majority of its $29.3bn revenues from web advertising. Facebook's advertising revenue is already beginning to challenge that of Yahoo, which last week reported a drop in revenues and profits through squeezes on its ad income.

About this article

Facebook Places Deals to target local business ads in UK and Europe

This article was published on
the Guardian website
at 07.07 EST on Monday 31 January 2011.
It was last modified at 02.30 EDT on Tuesday 20 May 2014.
It was first published at 06.58 EST on Monday 31 January 2011.